Investment for development

Kazakhstan: Launch of sector competitiveness report

Astana, Kazakhstan, 3 November 2010

Kazakhstan could attract further FDI in non-energy sectors

The OECD and the Cabinet of Ministers of the Republic of Kazakhstan presented initial findings from an OECD report on sector competitiveness in Kazakhstan at a launch event in Astana on 3 November 2010. The report, Kazakhstan: Sector Competitiveness Strategy, published in February 2011, suggests that Kazakhstan has a strong competitiveness and FDI potential in key non-energy sectors such as agri-business, fertilizers, logistics, business services and information technology.

The report notes that while the Kazakh economy has been expanding since 2000 at an annual rate of between 8-9%, making it among the ten fastest-growing economies in the world, this growth has been driven largely by the performance of its natural resources sector. Currently, oil exports represent 65% of the value of the country’s total exports. In addition, FDI to Kazakhstan -which accounts for over 80% of total FDI in the Central Asia region -- is concentrated in oil- and gas-related companies.

To diversify investment and unlock potential new sources of growth, the report’s findings indicate that government needs to remove barriers to the development of high-potential sectors. They note that while the government has successfully implemented a first generation of business climate reforms, these efforts need to be pursued. Improving access to finance, addressing skills gaps in the workforce and attracting modern retailers to Kazakhstan should top policy makers’ competitiveness reform priorities.

Download the key findings and recommendations from the publication (PDF)

“This joint sector competitiveness project with the OECD has helped Kazakhstan prioritise reforms that will help diversify foreign direct investment and improve economic productivity,” stated the Prime Minister of the Republic of Kazakhstan, Mr. Massimov, “The report will mark an important milestone in the ongoing collaboration between the Republic of Kazakhstan and the OECD.”

Mr. Fadi Farra, Head of the OECD Eurasia Competitiveness Programme, said, “Kazakhstan has strong comparative labour and transport cost advantages in certain sectors and large available arable land. This competitiveness potential remains to be tap into fully. We are looking forward to the co-operation between the OECD Eurasia Competitiveness Programme and the Government of the Republic of Kazakhstan.”